Development: A state project to restore seaside cottages is hindered by the slowing economy. A big donor may be needed, an activist says.

The state's ambitious plans to restore Crystal Cove's historic seaside cottages are in
jeopardy because of the slowing economy, which has prompted significant cuts in funding
for parks.

The state Parks Department intended to spend millions to renovate the coastal parkland
south of Newport Beach, possibly converting some of the turn-of-the-century cottages
into a science and education center.

But those plans are now in question, officials said, because Gov. Gray Davis has cut the
department's $300-million maintenance budget in half. Davis also has ordered all state
departments to prepare for further cuts up to 10%. Only $1 million is earmarked for
Crystal Cove, which isn't enough to complete even the sewer work that the state considers
a top priority.

"Under the present economic situation, funding is a problem," said Roy Stearns, the Parks
Department's deputy director. "We have a softening economy. We have an administration
telling us we may have to do [further] cutbacks."

The shortfall comes two months after the state evicted the last of the renters who for
years inhabited the cottages along the beach. Officials at the time said the evictions were
needed so the state could finally move forward with long-stalled plans to improve the area
and open up more of it to the public.

But some preservationists now fear the 46 cottages could fall into disrepair if renovation efforts don't begin soon.

"It's considered a no-no to vacate historical properties, because they're known to deteriorate much more rapidly," said Bruce Hostetter, a founding member of the Crystal Cove Community Trust.

"If it rains and there's a leak, if somebody's in the cottage it will be immediately detected. If no one's there, it may be days, weeks or months before the leak and the damage are detected."

The future of the cottages--which are listed on the National Register of Historic Places--has been a subject of debate for two decades.

Until recently, the state planned to have a developer transform the dwellings into hotel cabins that would rent for $375 a night. Park officials argued that the resort deal was necessary to finance $35 million worth of repairs to cottages, septic tanks and drainage systems.

But public opposition to the plan prompted the state to buy out the developer's contract for $2 million and move forward with its own plan, which would increase public access to the area and restore most of the cottages.

The state is continuing to develop a detailed plan for Crystal Cove, but Stearns acknowledges it remains unclear where the money will come from.

Davis made budget cuts across the board to deal with increased energy costs and a decline in state tax revenue. More cuts are expected if the economy doesn't improve.

Stearns said that if the state can't pay for the improvements, it will have to seek partners such as environmental foundations to donate $12 million to $25 million.

Fern Pirkle, of the Friends of the Irvine Coast, said the project could stall indefinitely unless the state can find a "big
contributor" to make a donation. One possible donor, she said, is the California Coastal Conservancy, which buys land to
keep it in open space.

"We're talking about at least $25 million to do the most modest plan," Pirkle added.

For now, the state is using the$1 million it does have for minor maintenance work, such as fixing leaky roofs, boarding up windows, installing a temporary sewer tank and paying a private security firm to guard against vandalism.

The most expensive improvements will have to wait, and no one is sure for how long.

"From the state parks point of view, we are committed to making the historical district at Crystal Cove work and thrive," Stearns said. "We told the people we will make this work, and we're going to keep that promise."